Spotify shares surged 15% on Thursday after the company outlined an aggressive long-term growth strategy through 2030 and announced a major artificial intelligence licensing agreement with Universal Music Group, signaling a deeper structural shift in how music rights, monetization, and AI-generated content will intersect.

The rally followed Spotify’s first investor day since 2022, where executives set out what they described as a “north star” ambition: reaching 1 billion users and $100 billion in revenue over the long term. The company also projected revenue growth at a compound annual rate in the mid-teens, alongside gross margins expanding to between 35% and 40%, a notable signal of improved operating leverage in a business historically constrained by heavy royalty costs.

Co-CEO Gustav Söderström told CNBC that growth momentum remains intact across both free and paying users.

“We are still firing on all cylinders,” Söderström said in an interview with CNBC’s Julia Boorstin. “We’re seeing strong growth in free users and in subscribers.”

The updated outlook helped reverse recent investor concerns. Spotify shares had lost roughly a quarter of their value over the past year amid doubts about saturation in mature streaming markets and intensifying competition for listener attention across podcasts, short-form video, and AI-generated audio platforms.

AI licensing deal signals shift in music creation economics

A central catalyst for the rally was Spotify’s agreement with Universal Music Group to integrate artificial intelligence tools into its platform under a structured licensing framework.

Under the deal, Spotify will allow users to generate covers and remixes using the voices of artists and songwriters who explicitly opt in. The tool will initially launch as a paid add-on for premium subscribers, creating a new monetization layer above existing subscription revenue.

The company framed the partnership as a response to a rapidly evolving legal and technological landscape in which AI-generated music is increasingly blurring the boundaries between human and machine creativity. The platform has previously worked with major labels to develop what it called “responsible AI” tools, but this marks its most concrete commercial rollout of such capabilities.

Söderström said the arrangement addresses a longstanding gap in the industry’s licensing structure.

“It hasn’t been possible for existing creators to participate because there was no legal licensing framework,” he said.

The move positions Spotify not only as a distributor of music but as a controlled gateway for AI-assisted creation, a shift that could redefine how royalties are distributed and how artists engage with synthetic versions of their own work.

The Universal Music catalog includes some of the world’s most commercially valuable artists, including Billie Eilish and Taylor Swift, underscoring the scale of rights now being incorporated into AI-enabled tools.

Industry realignment under legal and competitive pressure

The broader music industry is undergoing structural change as rights holders and technology firms attempt to establish boundaries for AI training and generation.

Major record labels, including Warner Music Group, Universal Music Group, and Sony Music, have already been engaged in litigation and settlements with AI music startups such as Suno and Udio over alleged unauthorized use of copyrighted material in model training. Those cases have accelerated pressure on streaming platforms to formalize licensing systems before AI-generated content becomes widespread.

Spotify’s approach reflects a pivot toward embedding AI within regulated, opt-in frameworks rather than allowing unlicensed generation models to proliferate outside industry control. At the same time, Spotify is attempting to broaden its business beyond core music streaming. The company has expanded into podcasts and audiobooks, while also introducing fan engagement tools such as early ticket access for select users, designed to deepen loyalty and reduce churn in a highly competitive subscription market.

Since 2022, Spotify said it has added more than 340 million users, while its paid subscriber base has increased by over 110 million, reinforcing its scale advantage even as growth rates normalize in mature Western markets.

The investor day marked a strategic reset under newly structured leadership after founder Daniel Ek stepped down earlier this year following two decades at the helm. Co-CEOs Söderström and Alex Norström are now steering the company through a period defined by AI disruption, margin pressure from licensing costs, and intensifying competition from tech platforms integrating audio into broader entertainment ecosystems.

The company’s updated financial framework signals confidence that AI-enabled features can expand average revenue per user, particularly through premium add-ons and creator tools, while maintaining cost discipline in royalty-heavy operations.

Still, it is believed that the long-term success of the strategy will depend on how effectively Spotify can balance three competing forces: rights holders demanding tighter control over AI-generated content, users expecting increasingly flexible creation tools, and investors pushing for sustained margin expansion in a structurally constrained industry.

Nvidia CEO Jensen Huang has openly acknowledged that the company has “largely conceded” the Chinese artificial intelligence chip market to Huawei and local competitors due to stringent U.S. export restrictions.

This comes as the company delivered another record-breaking quarter and positioned itself for major new growth in an emerging $200 billion market, announced by CEO Jensen Huang.

Speaking to CNBC after reporting exceptional fiscal results, Huang was pragmatic about the challenges in China while expressing strong confidence in Nvidia’s ability to capture massive new opportunities elsewhere.

Nvidia reported revenue of $81.62 billion, an impressive 85% increase from $44.06 billion a year earlier. The performance underscores the continued explosive demand for its GPUs amid the global race to build AI infrastructure. The company also announced an $80 billion share buyback program and raised its dividend, signaling strong belief in its long-term growth trajectory despite geopolitical headwinds.

Huang was blunt about the impact of U.S. policy on Nvidia’s presence in China, a market that once represented at least 20% of its data center revenue.

“The demand in China is quite large. Huawei is very, very strong. They had a record year, they’ll likely, very likely, have an extraordinary year coming up, and their local ecosystem of chip companies are doing quite well, because we’ve evacuated that market. We’ve really largely conceded that market to them,” he said.

Huang tempered expectations for any near-term relief, telling investors to “expect nothing” regarding approvals for advanced chips. However, he left the door open for the future.

“We would be more than delighted to serve the market. We have a lot of customers there, we have a lot of partners there, and we’ve been there for 30 years,” he added.

The comments come shortly after President Donald Trump’s summit with Xi Jinping in Beijing. While limited approvals for Nvidia’s H200 chips were granted to companies such as Alibaba, Tencent, ByteDance, and JD.com, broader restrictions remain firmly in place, and chip policy was not a central focus of the high-level discussions.

Vera CPU Unlocks Brand New $200bn Market

Despite the setback in China, Huang outlined an ambitious vision for growth through Nvidia’s new Vera CPU platform, which he described as purpose-built for the emerging era of agentic AI — autonomous AI systems capable of complex reasoning, planning, and task execution.

Huang called this a transformative new addressable market: “Vera opens a brand new $200 billion TAM for Nvidia, a market we have never addressed before, and every major hyperscaler and system maker is partnering with us to deploy it.”

He revealed that Nvidia has already generated $20 billion in sales of standalone Vera CPUs this year, even as the product is still ramping up. Huang believes agentic AI will lead to billions of AI “agents” functioning like digital workers, each requiring powerful CPUs optimized for rapid token processing and tool usage — distinct from the GPU-heavy workloads used for training large models.

“The world has a billion users, human users. My sense is that the world is going to have billions of agents… We’re going to need a lot more CPUs,” he said.

This expansion forms part of Nvidia’s broader “five-layer cake” strategy, spanning energy infrastructure, chips, systems, models, and applications. By controlling more layers of the AI stack, Nvidia aims to capture greater value and build deeper moats against competitors.

Nvidia’s new reality was orchestrated by the new geopolitical reality reshaping the semiconductor industry. U.S. export controls have accelerated China’s drive for technological self-sufficiency, benefiting Huawei and a growing ecosystem of domestic players. At the same time, they are compelling Nvidia to accelerate innovation and diversification in markets where it retains clear leadership.

The Vera CPU launch represents a bold move into the traditional CPU domain long dominated by Intel and AMD. With major cloud providers like Amazon, Google, and Microsoft developing their own custom silicon, Huang is betting that Nvidia’s tightly integrated platform, combining Vera CPUs with its dominant GPUs, will give it a decisive advantage in the shift toward agentic and physical (robotic) AI systems.

Wall Street continues to watch closely. While Nvidia’s dominance in AI infrastructure remains overwhelming, concerns linger about potential margin pressure and competition from in-house solutions at hyperscalers. However, the early traction of Vera suggests the company is successfully extending its reach into adjacent high-growth areas.

In recent years, the vaping market hasn’t really moved in one single direction. It has started to split, slowly but noticeably, into different patterns of use. Nicotine-based products are still the most common overall, but there is a steady shift happening on the margins toward nicotine-free options.

What’s interesting is that this shift doesn’t really feel like something being introduced by the industry. It feels more like users gradually changing how they approach the same devices. For a growing group of adult vapers, vaping is less about nicotine delivery and more about flavor, routine, or simply how they use it in specific moments of the day.

In practice, this shows up in simple behavior changes. Some users don’t fully switch — they alternate depending on context. A disposable device with nicotine might be used during the day, while nicotine-free options appear more often in casual situations like evenings out, short breaks, or travel, where lighter setups feel more practical.

Over time, the devices themselves have also improved. Earlier nicotine-free vapes often had clear trade-offs — weaker flavor output, inconsistent performance, or shorter lifespan. That gap has narrowed with better coil systems, improved airflow design, and the wider use of rechargeable disposable devices and pod systems that now perform more consistently across different usage styles.

This is also reflected in how products are now structured in the market. Many retailers and manufacturers now separate nicotine-free products into dedicated categories, making them easier for users to identify and compare. Some platforms simply group them under dedicated zero nicotine vape sections.

Instead of being treated as a niche add-on, nicotine-free options are now just another part of the same ecosystem.

Flavor still plays a major role in why users stay within this category. Without nicotine, fruit and ice blends are often described as feeling slightly more open and less muted, although the difference is usually subtle.

There is also a practical side that shows up in real use. Nicotine-free vaping tends to appear in specific situations rather than as a constant habit — travel days, social environments, or short breaks during work, where users prefer something lighter and less tied to routine.

It also helps that nicotine-free versions now exist across different device types, including compact pod systems, rechargeable disposable vapes, and higher-capacity devices designed for longer, more flexible use.

Overall, this is not a replacement of traditional vaping. It is more of a parallel layer that users move in and out of depending on situation, preference, and daily context.